Day Trading Stocks & Options

What You Need to Know –

Day Trading

In the late 1990s the retail trader came into being with the advent of online trading and discount brokers.  It wasn’t long before the lure of the new-found freedom and exaggerated claims pulled many would-be traders into the market to make their fortune with the magic of Day Trading.  Without any education or training, the early fortune seekers soon learned that magic is an illusion and reality a stern teacher.

Seeing day traders sitting in front of six or eight computer screens all day trading Stocks with large sums of money to capture pennies per trade over and over again throughout the day convinced me that the individual trader sitting at home was not going to be able to compete with the professionals without a lot of help.  I detail the process below under “The Details” to give you an idea of the added complexities dealing with Stocks.

So, the idea is not to compete with the professionals but to join them.  That’s where Your Trading Partners come into the picture.

Day Trading Stocks –

Without the institutional-grade platforms and the instantaneous access to market research, the individual traders of the world are at a distinct disadvantage.  With the amount of capital needed to make Day Trading Stocks successful, the retail trader is way too far out on the risk curve not to have professional guidance to ensure success.

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Stocks Inner Circle, Trading & Options Schools, and Options Inner Circle

That’s where Benzinga and Matt Maley’s Stocks Inner Circle come into play.  Benzinga Pro, the best Market Intelligence platform specifically designed for the individual trader, adds to the mix by providing fast market news and analysis to give you a significant trading advantage.  With the obstacles the individual trader has trading in the stock market, the leadership, technology, and education available at Benzinga to guide you through the maze of alternatives will give you the confidence to become an efficient day trader and meet all your goals.  Benzinga Trading School, taught by Mark Putrino and including Benzinga Pro, is there for everyone who wants to learn about or expand their knowledge of trading in the Stock Market.

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Live Day Trading Room for Stocks, ETFs, and Futures

For the larger account holder or hedge fund manager, InTheMoneyStocks and their Live Day Trading Room fit the bill (I recommend having at least a $200,000 balance in your trading account to get started).  All the obstacles the individual trader faces are already addressed and dismissed through Nick and Gareth’s years of research and development and dedication to their members’ success.

 

Day Trading Options –

A lot of the drawbacks of day trading stocks are overcome by using Options.  Although you still have to adhere to the Pattern Day Trading rules and trade multiple contracts, your capital outlay to day trade options is significantly less than using stocks.  Availability is assured when using only Optionable Stocks, Indexes, and ETFs, so your emphasis is transferred from worrying about the problems with day trading stocks to trading the right options for the current market conditions.  Professional guidance is still necessary to achieve consistency in account growth over time, and you have to learn what Options are all about, but you have much more control over the process and managing risk.

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Options School & Options Inner Circle for Day & Swing Trading

Benzinga and their professional traders, along with Benzinga Pro, provide outstanding trading opportunities in all timeframes and trading methods.  For Day Trading Options, the Benzinga Options School taught by Chris Capre gives you the opportunity to get a great education and make money at the same time by taking part in Chris’s trading room, which is a part of the package.  For advanced traders and beginners alike, you also have access to Benzinga Pro to round out a complete education and trading methodology.

Nic Chahine and his Options Inner Circle trading room give beginners and advanced traders a place to jump right in and continue trading, this time with Nic’s help and extensive education offerings, along with being a part of a community of traders, so necessary to increasing your win rate.

With Benzinga, Following Matt, Chris, and Nic’s lead and trading alongside the other members in the room is your ticket to success and getting a handle on consistency – the holy grail of trading.

The Details

Without professional help, the cumbersome, capital intensive nature of the process, with very little control over the outcome, is only part of what puts the individual trading alone at a disadvantage in the market.  Some of the other issues involving Day Trading Stocks are:

  • With market makers controlling a lot of the order flow and the advent of High Frequency Trading (HFT) by computers running sophisticated algorithms, individual traders are put in a very precarious position trying to compete with the professionals.
  • Because of that reality, traditional order flow and volume analysis (think Level 2 Quotes) has been compromised, relegating traders to price action alone, which puts the individual trader behind the curve in being able to execute trades in a timely manner.  By the time I saw an entry point and set up the trade, the market had moved away from where I wanted to get in.  Worse yet, I would execute a trade and then suddenly the market would move against me and hit my stop order – very frustrating.
  • The process of finding the right stocks to trade under the right circumstances (gaps, breakouts, buying/selling pressure, etc.….) is a full-time job in itself with very little reliability, making the odds of being in the right place at the right time very low.  And, individual stock event risk can cause havoc to the best laid plans, complicating any strategy.
  • Buying and Shorting Stocks and the use of margin also complicate the process, making it more difficult to manage and harder to overcome the Bid/Ask Spreads.  Capital requirements are higher than for other Methods for the same return on investment, and the Pattern Day Trading rule stipulates that you must have $25,000 or more in your account to day trade stocks and Options.  As I mentioned earlier, to make Day Trading Stocks work, the professionals trade with many times that amount.

To overcome and manage these issues, the need for professional guidance is particularly important when it comes to Day Trading Stocks.  Being closer to the market, so to speak, and making trading a full-time career, the professional provides the individual trader with the market intelligence so important to maintaining productivity to support a smooth growth curve.

Using Options makes the process a lot easier to manage.  Lower capital requirements, not having to worry about availability and shorting stocks, being able to use indexes and their ETFs, and the added flexibility of options make for a much more efficient and risk averse process.

The Answer

With the right professional trading program, a change in mindset, and personal commitment, the benefits of Day Trading Stocks and Options can be  very rewarding for those of you who would like to make the Method a part of your Wealth Building Plan.

But know that the path to success is through education and professional guidance.

I’ve mentioned the challenges earlier, and if you can overcome them and learn from a professional with the right expertise, who’s made the Method a career themselves, you’ll be in the right place to be consistent and achieve your goals.  Dedication to the task, education, and training with the professionals will get you there.

 

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Education & Alerts for Day Trading Stocks, ETFs, and Futures

 

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Stocks Inner Circle, Trading & Options Schools, and Options Inner Circle

 

If you’re new to taking control of your financial future, the best place to start building wealth on your own terms is to learn all about Education – The Path to Independent Wealth Management, which will set you on the path to creating your Wealth Building Plan the right way.  The Diversified Trader – An Overview will come next to get you on the right path to wealth building success.

 

To Making Good Choices,


Ted Bliss
Your Research & Development Coordinator
TheDiversifiedTrader.com